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Income Taxes

12 Months Ended

Jun. 30, 2025

Income Taxes

Income Taxes

12. Income Taxes

The components of income before income taxes consisted of the following:

​

​	​	​	​	​	​	​	​	​	​
For the Year Ended June 30		2025			2024			2023
Domestic	​	$	3,304	​	$	(22,820)	​	$	14,776
Foreign	​		64,689	​		33,736	​		39,295
Income before income taxes	​	$	67,993	​	$	10,916	​	$	54,071

​

​

Components of the provision for income taxes were:

​

​	​	​	​	​	​	​	​	​	​
For the Year Ended June 30		2025			2024			2023
Current provision:		​			​			​
Federal	​	$	5,557	​	$	3,037	​	$	9,801
State and local	​		2,448	​		1,718	​		1,810
Foreign	​		16,477	​		15,740	​		12,750
Total current provision	​		24,482	​		20,495	​		24,361
Deferred provision (benefit):	​		​	​		​	​
Federal	​		(4,412)	​		(4,755)	​		(6,151)
State and local	​		(1,521)	​		(1,523)	​		(266)
Foreign	​		1,171	​		(4,468)	​		3,424
Change in foreign valuation allowances	​		9	​		(1,249)	​		97
Total deferred benefit	​		(4,753)	​		(11,995)	​		(2,896)
​	​	​	​	​	​	​	​	​	​
Provision for income taxes	​	$	19,729	​	$	8,500	​	$	21,465

​

Reconciliations of the federal statutory rate to the Company’s effective tax rate were:

​

​	​	​	​	​	​	​	​
For the Year Ended June 30		2025		2024		2023	​
U.S. federal statutory income tax rate		21.0	%	21.0	%	21.0	%
State and local taxes, net of federal benefit		0.6	​	(1.1)	​	2.0	​
Taxes on non-U.S. income		(0.6)	​	9.9	​	8.9	​
Changes in uncertain tax positions	​	—	​	30.7	​	5.1	​
Global Intangible Low-Taxed Income		4.7	​	18.3	​	3.3	​
Recognition of federal and foreign tax credits	​	(13.7)	​	(10.6)	​	(3.1)	​
Change in valuation allowance	​	(0.1)	​	(11.4)	​	0.2	​
Foreign derived intangible income	​	—	​	(3.8)	​	(3.7)	​
Non-U.S. withholding and related taxes, net, on planned repatriation	​	13.0	​	28.4	​	—	​
Impact of foreign tax credit regulations and related changes	​	—	​	(20.0)	​	1.9	​
Non-deductible operating expenses	​	2.9	​	11.3	​	0.9	​
Non-deductible acquisition costs	​	—	​	4.3	​	—	​
Other		1.1	​	0.9	​	3.2	​
Effective income tax rate		29.0	%	77.9	%	39.7	%

​

We record the GILTI aspects of comprehensive U.S. income tax legislation as a period expense. The provision for income taxes for the years ended June 30, 2025, 2024 and 2023, included $3,198, $2,003 and $1,775 of federal tax expense from the effects of GILTI, respectively.

The Company benefits from certain tax holidays in Israel; the impact of which are included within Taxes on non-U.S. income.

The tax effects of significant temporary differences that comprise deferred tax assets and liabilities were:

​

​	​	​	​	​	​	​
As of June 30		2025			2024
Deferred tax assets:	​	​	​	​	​	​
Employee-related accruals	​	$	5,940	​	$	6,620
Inventory	​		10,681	​		1,521
Environmental remediation	​		783	​		767
Net operating loss carry forwards–domestic	​		689	​		777
Net operating loss carry forwards–foreign	​		2,705	​		3,813
Operating lease liabilities	​	​	8,399	​	​	6,788
R&D cost capitalization	​	​	8,647	​	​	7,227
Unrealized foreign exchange	​	​	—	​	​	1,470
Interest expense limitation	​	​	3,900	​	​	4,518
Accrued expenses	​	​	11,001	​	​	5,535
Acquisition related expenses	​	​	2,161	​	​	1,167
Other	​	​	4,703	​		522
​	​		59,609	​		40,725
Valuation allowance	​		(1,279)	​		(1,288)
​	​		58,330	​		39,437
Deferred tax liabilities:	​		​	​		​
Property, plant and equipment and intangible assets	​	​	(18,989)	​	​	(5,282)
Operating lease ROU assets	​	​	(7,939)	​	​	(6,441)
Prepaid expenses	​	​	(1,728)	​	​	(1,505)
Unrealized foreign exchange	​	​	(1,601)	​	​	—
Non-U.S. withholding and related taxes, net, on planned repatriation	​	​	(250)	​	​	(2,828)
Other	​		(6,472)	​		(4,677)
​	​		(36,979)	​		(20,733)
​	​	​	​	​	​	​
Net deferred tax asset	​	$	21,351	​	$	18,704

​

Deferred taxes are included in the consolidated balance sheets as follows:

​

​	​	​	​	​	​	​
As of June 30		2025			2024
Other assets	​	$	25,548	​	$	19,371
Other liabilities	​		(4,197)	​		(667)
​	​	$	21,351	​	$	18,704

​

The valuation allowance established against deferred tax assets was:

​

​	​	​	​	​	​	​	​	​	​
As of June 30		2025			2024			2023
Balance at beginning of period	​	$	1,288	​	$	2,598	​	$	2,618
Benefit for income taxes	​	​	(9)	​		(1,310)	​		(20)
Balance at end of period	​	$	1,279	​	$	1,288	​	$	2,598

​

The Company records valuation allowances against certain foreign and state deferred tax assets when, after considering all of the available evidence, it is more likely than not that these assets will not be realized.

The Company has $18,748 of state net operating loss carry forwards, of which $11,359 that will expire in 2025 through 2044, and $7,389 that do not expire. The Company has $11,598 of foreign net operating loss carry forwards primarily in jurisdictions that have no expiration.

​

If amounts are repatriated from certain of our foreign subsidiaries, we could be subject to additional non-U.S. income and withholding taxes. In connection with the Acquisition (see Note 3), we expect to repatriate approximately $5,000 of non-U.S. earnings, which will be subject to applicable non-U.S. withholding and related taxes. As of June 30, 2025, we recorded a liability of $250 related to undistributed earnings of our Suzhou subsidiary in China. We consider all other undistributed earnings of such foreign subsidiaries to be indefinitely reinvested. We do not provide income taxes for foreign currency translation adjustments relating to investments in international subsidiaries that will be held indefinitely.

As tax law is complex and often subject to varied interpretations, it is uncertain whether some of our tax positions will be sustained upon examination. Tax liabilities associated with uncertain tax positions represent unrecognized tax benefits, which arise when the estimated benefit recorded in our financial statements differs from the amounts taken or expected to be taken in a tax return because of the uncertainties described above. Substantially all of these unrecognized tax benefits, if recognized, would reduce our effective income tax rate.

Reconciliations of the beginning and ending amounts of gross unrecognized tax benefits are as follows:

​

​	​	​	​	​	​	​	​	​	​
As of June 30		2025			2024			2023
Unrecognized tax benefits–beginning of period	​	$	11,861	​	$	9,449	​	$	7,832
Tax position changes–current period	​		(809)	​		2,066	​		2,181
Tax position changes–prior periods, including settlements with tax authorities	​		541	​		615	​		193
Lapse of statute of limitations	​		(637)	​		(58)	​		(194)
Effect of changes in exchange rates	​		1,514	​		(211)	​		(563)
Unrecognized tax benefits–end of period	​		12,470	​		11,861	​		9,449
Interest and penalties–end of period	​		2,804	​		1,689	​		981
Total liabilities related to uncertain tax positions	​	$	15,274	​	$	13,550	​	$	10,430

​

We recognize interest and penalties associated with uncertain tax positions as a component of the provision for income taxes. We recognized and recorded interest and penalties expense of $888, $740 and $589 for 2025, 2024 and 2023, respectively.

Income tax returns for the following periods are no longer subject to examination by the relevant tax authorities:

● U.S. federal and significant states, through June 30, 2021;

● Brazil, through December 31, 2019; and

● Israel, through June 30, 2020.

​

On July 4, 2025, the United States enacted “An Act to Provide for Reconciliation Pursuant to Title II of H. Con. Res. 14,” (“OBBBA”), also known as the “One Big Beautiful Bill Act.,” OBBBA made significant changes to the Internal Revenue Code, including the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions such as 100% bonus depreciation, domestic research cost expensing, and adjusting the business interest expense limitation.

​

OBBBA has multiple effective dates, with certain international tax provisions not impacting the Company until July 1, 2026. The Company is currently evaluating the potential impact of this legislation on its consolidated financial statements. Any material effects of OBBBA, including remeasurement of deferred tax assets and liabilities and changes to current and future tax expense, will be reflected in the period of enactment and in future periods as additional guidance is issued and the Company completes its analysis.

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The entire disclosure for income tax.

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